Calculate margin, net income, and ROE For the year ended December 31,2009, Ebanks, Inc. earned an ROI of 12%. Sales for the year were $96 million, and average asset turnover was 2.4 Average owners equity was $32 million.
Calculate Ebanks, Inc.’s margin and net income
Calculate Ebanks, Inc.’s return on equity
To calculate Ebanks, Inc.'s margin, net income, and return on equity (ROE), we can use the given information and the following formulas:
1. Margin = Net Income / Sales
2. Net Income = ROI * Sales
3. ROE = Net Income / Average Owners Equity
Step 1: Calculate Net Income
Net Income = ROI * Sales
Net Income = 0.12 * $96 million
Net Income = $11.52 million
Step 2: Calculate Margin
Margin = Net Income / Sales
Margin = $11.52 million / $96 million
Margin = 0.12 or 12%
Therefore, Ebanks, Inc.'s margin is 12% and the net income is $11.52 million.
Step 3: Calculate ROE
ROE = Net Income / Average Owners Equity
ROE = $11.52 million / $32 million
ROE = 0.36 or 36%
Therefore, Ebanks, Inc.'s ROE is 36%.